A Changing MediaEnvironment ?
Timo Ruikka27 February 2008
Nokia will bring everyone to Internet
Six focus areas
Games
Photos
Music
Internet
Video
Maps,Navigation &
Search
Broadcast, Mobile and Fixed Networks willconverge and enable new user experiences
CONTENT
Today Tomorrow
Convergedmedia delivery
architecture
telecom
mobile
broadcast
Separatemedia
CONTENT
deliveryplatforms
cable
satellite
Digital Convergence Requires HorizontalStructure
Delivery
Consumption
New Horizontal Market
Content
ServiceProvision
Content
BroadcastingTerrestrial/ Cable/ Satellite
Content
Content
Service Provision
ServiceProvision
Service Provision
Fixed-linenetwork
Mobilenetwork
TV, radioPC,
telephoneMobile
terminal
Independent of location
Opportunities and risks from convergence• Convergence Promise: “more” “greater value” “innovation” “network effects”
• Major value chain disruption / redefinition• Big winners emerge (eventually)• Big (and currently powerful) losers will not give up easily
• Verticalization as barrier• Tasks and transfers (roles, prices, terms) are up in the air
• Transaction costs as a barrier
• Territoriality as a barrier
• Creating / maintaining / re-establishing the needed societal balance• Security vs. civil liberties• Rightsholders and consumers• Liability of intermediaries
My work perspective to this
• The Mess in Digital Media
• Media-related regulatoryagenda right now
Decade of Fear
•WIPO Digital Agenda•WIPO Digital Copyright Treaty 1996•U.S. Digital Millennium Copyright Act 1998•EU Information Society Directive 2001•Napster litigation• ISP, User litigation
Lots of legal activity…But Very Little Business Through Digital Distribution
12 months of panic• Steve Jobs’ “Thoughts on Music” - Feb 6 2007• CD sales tanking, downturn accelerates (- 22 % 4Q07)
• Stores closing, floor space reductions
• 360-degree deals vs. Artists becoming less dependent• Big fights about Internet royalties to artists etc.• Pricing disagreements – wholesale level disarray• Power Struggle Labels vs. Apple, others – refusals to trade• Unconstrained content: EMI (Apr. 07), UMG (Aug. 07), Sony BMG and Warner
(Jan 08)• Wal-Mart, Amazon among new channels• Pay What You Want releases appear
Old Paradigm becoming obsoleteNew Experiments – short of Sustainable Business Direction
Pay What You Want – the solution ?• Radiohead new album can be downloaded at any price (even free) – a pay what you
want model• Radiohead's test may set an example for more such experiments. Besides naming their
own price for the new album, fans can also buy a luxury version: £40 ($82) will buy a boxcontaining two vinyl LPs and two CDs as well as artwork and lyric booklets.
Weighted Average: $2
Regulatory actions – examples of topical EUcontextTopics of broad review
• TV without frontiers directive• Content Online consultation• Telecom package• Mobile TV• Standardization policy• Standards and IPR
Tough questions to solve
• Copyright limitations(exceptions) and levies (or othercompensation systems)
• DRM interoperability and DRMissues for consumers
• EU-wide content licensing• Copyright enforcement in the
Web (filtering – cutting offaccess ?)
Takeaways• Change is bigger than “just” migrating from offline to online• Technology is an enabler of change• Value chain adjustments take years, even decades to play out• Legislation and regulation can be catalyst for change – and a barrier• Absolutely necessary to ask the question of what regulation is needed and what
is the role of the regulator• Single market arguments often speak for harmonization and/or centralization at
EU level
Thank you